America's employers slowed their hiring in September but still added a solid 263,000 jobs—a dose of encouraging news that may mean the Federal Reserve's drive to cool the job market and ease inflation is starting to make progress. Friday's government report showed that last month's job growth was down from 315,000 in August, and that the unemployment rate fell from 3.7% to 3.5%, matching a half-century low, reports the AP. That dip was an unexpected one, per Bloomberg. September's slightly more moderate pace of hiring may be welcomed by the Fed, which is trying to restrain the economy enough to tame the worst inflation in four decades without causing a recession. Slower job growth would mean less pressure on employers to raise pay and pass those costs on to their customers through price increases—a recipe for high inflation.
The public anxiety that has arisen over high prices and the prospect of a recession is also carrying political consequences as President Biden's Democratic Party struggles to maintain control of Congress in November's midterm elections. In its epic battle to rein in inflation, the Fed has raised its benchmark interest rate five times this year. It's aiming to slow economic growth enough to reduce annual price increases back toward its 2% target. It has a long way to go. In August, one key measure of year-over-year inflation, the consumer price index, amounted to 8.3%. And for now, consumer spending—the primary driver of the US economy—is showing some resilience. In August, consumers spent a bit more than in July, a sign that the economy was holding up despite rising borrowing rates, violent swings in the stock market, and inflated prices for food, rent, and other essentials.
Fed Chair Jerome Powell has warned bluntly that the inflation fight will "bring some pain," notably in the form of layoffs and higher unemployment. Some economists remain hopeful that despite the persistent inflation pressures, the Fed will still manage to achieve a so-called soft landing: slowing growth enough to tame inflation, without going so far as to tip the economy into recession. Powell and his colleagues on the Fed's policymaking committee want to see signs that the abundance of available jobs—there's currently an average of 1.7 openings for every unemployed American—will steadily decline. Some encouraging news came this week, when the Labor Department reported that job openings fell by 1.1 million in August to 10.1 million, the fewest since June 2021.
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